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MSC EVP: Ocean containers must get ‘smarter’

Pandemic highlights need for industry digitization

The COVID-19 pandemic has put a spotlight on the need for digitization in the ocean container carrier industry, according to MSC’s executive vice president of commercial operations.

“Our objective is to make the container a smarter object,” Tom Hughes said during a Port Houston-hosted webinar on the state of imports Thursday.

The rise and fall of coronavirus outbreaks has made for “a very dynamic situation” and requires close collaboration among the shipping lines and their port partners, customers and intermodal providers, he said. “It takes a whole community.”

A digital community would provide that needed transparency and visibility as the world’s ports currently struggle with congestion caused by import surges that followed factory shutdowns, particularly in China. 

“We need to be able to react when we see things that are turning,” Hughes said. “Watching those trends now so very closely is what’s most important for us right now.” 

Based in New York, Hughes oversees all U.S. imports for MSC Mediterranean Shipping Co.

MSC launched its Instant Quote e-tool this summer and completed its integration onto the TradeLens blockchain-enabled shipping platform in mid-October.

During the height of shutdowns, “we allowed containers to basically rest or sit at different transshipment hubs around the globe until things started to open up. And did they ever,” Hughes said. 

“The demand started creeping back and suddenly it started taking off,” he continued, pointing out that MSC added services during the third quarter to meet the need. “We also brought in extra loaders to help because the demand was so great.”

Hughes said MSC was able to do this by maintaining close contact with stakeholders — and making changes where needed. “Obviously everything with COVID is a learning curve — working from home, buying things from home.” 

MSC expects the import rush in the U.S. seen in Q3 to continue into the first quarter of 2021.

“We have to manage capacity and that’s something that we’ve been doing. … We’re trying to do it smartly,” Hughes said. “It’s kind of a prudent approach to capacity management.”

All this, he said, drives home the “need to be agile and nimble and the need for digitization.”

Like the ocean carriers, ports around the world have been issuing “busiest month ever” reports for October. Port Houston has joined that bandwagon, heralding its single busiest month.

Port Houston in October handled more than 296,000 twenty-foot equivalent units (TEUs), its highest total in a single month and a 15% increase over the same period last year. Notably, 2019 was the port’s busiest year and as of the end of October, it is only trending 1% down. 

Ty Reasonover, senior manager of trade development for Port Houston, said during Thursday’s webinar that the fourth quarter is looking “very, very strong.”

Reasonover said the port is planning for larger container ships in part with the widening of the shipping channel by 170 feet to 700 feet along Galveston Bay and deepening of upstream segments of the channel to 45 feet. The project is slated for a 2024 completion, Reasonover said. 

Funding is included in the Water Resources Development Act, which has passed the U.S. House and sits in the Senate, he said. 

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Click for more American Shipper/FreightWaves stories by Senior Editor Kim Link-Wills.

Kim Link Wills

Senior Editor Kim Link-Wills has written about everything from agriculture as a reporter for Illinois Agri-News to zoology as editor of the Georgia Tech Alumni Magazine. Her work has garnered awards from the Council for the Advancement and Support of Education, the Georgia Institute of Technology and the Magazine Association of the Southeast. Prior to serving as managing editor of American Shipper, Kim spent more than four years with XPO Logistics.